John Lewis Partnership has posted a near 15 per cent drop in first-half profits blaming “deep structural changes in the retail market”.

Operating profit at John Lewis stores fell 31.2 per cent to £32.4 million and dropped 28.9 per cent to £96.3 million at Waitrose in the first six months and the group warned profits are likely to remain under pressure.

The partnership, which also owns the Waitrose supermarket chain, said first half profits fell to £81.9 million which chairman Sir Charlie Mayfield said reflects market conditions rather than the UK's vote to leave the EU.

John Lewis had warned in July the drop in the value of sterling could become a problem if the slump in value extends beyond the current year, which it hedged for.

Sir Charlie said the Brexit vote has had “little quantifiable impact on sales so far,” but added there are “far-reaching changes taking place in society, in retail and in the workplace, that have much greater implications”.

The Partnership notes after taking a £25 million write-down on property assets in the Waitrose unit it no longer intends to develop, which served to drag first half profits down 75 per cent to £56.9 million.

It has scrapped plans to open seven Waitrose stores following a strategic review and will instead be “re-prioritising future investment spend towards existing stores”.

Sales across the group were up 3.1 per cent to £5.3 billion, however the pension deficit widened by 54.4 per cent to £1.45 billion as a result of historically low bond yields.

John Lewis, which in employee owned and distributes profits to its 90,000 staff, said it intends to ensure pay remains “well above” the national living wage, which will add £33 million to the overall wage bill against meeting the minimum requirements of the national living wage.

The partnership anticipates this will result in fewer staff being employed over the longer term, though any reduction in staff will be “gradual”.

Sir Charlie said: “We have grown gross sales and market share across both Waitrose and John Lewis, but our profits are down.

“This reflects market conditions and, in particular, steps we are taking to adapt the partnership for the future.”